Our homes are essential pieces of our lives, and if something were to happen to them, it would need to get fixed. Issues vary from minor fixes to major problems. These major issues can keep some people up at night as they can get extremely costly; this is where homeowners insurance comes in.
At its core, homeowners insurance is an insurance policy that covers losses and damages to your home and assets in the house. A typical homeowners policy typical covers: – Damages to the exterior of a home – Damages to the interior of a home – Loss or damage to personal assets – Injuries that occur on the property
There are different types of insurance coverages in the US, and depending on which one you choose, it will change the amount you might receive from a claim.
With actual cash value coverage, you’d be covered for the cost (how much you paid) of your home and belonging after accounting for depreciation (how much the house and belongings are currently worth). Likely, this would mean you would receive less for your home and belongings than you originally paid.
Replacement value policies are the same as actual cash value except it does not take depreciation into account. This would mean you would be able to receive the amount you originally paid for both your home and possessions.